NAMB outlines 4-part housing affordability fix

An integrated solution involving four key areas needs to come to fruition in order to solve the affordable housing crisis, the National Association of Mortgage Brokers argues in its latest white paper.

Those points were listed in a document accompanying the white paper and include:

• Increasing the housing supply
• Reducing regulatory barriers
• Lowering transaction costs
• Expanding financing access

"Anytime we talk about housing, anytime we talk about affordability issues, that's great, but what are the solutions that we can implement now?" said Kimber White NAMB's president. "Everything comes together, but it's not an end all, be all."
He, along with Valarie Saunders, NAMB's chief executive, recently met with the National Mortgage News staff in its New York offices.

A meeting with Thompson on LLPAs

White, who is serving a second term as NAMB's president, had his initial time in the role in 2020 and 2021, the latter year being when Sandra Thompson began heading up the Federal Housing Finance Agency.

White and others from NAMB met with Thompson, who told them it was supporting the loan level pricing adjustments for investor properties and second homes, "because we want first time home buyers to get in the houses," to which he responded to the then-FHFA director that this strategy was not going to work.

"They're going to pay cash, they're going to hold on to them, they're going to drive the markets up," White recounted. "So what you think is going to happen isn't going to happen."

A more effective strategy would be to bring back the "first look" program, where houses in foreclosure for a 90-day period were only marketed to certain groups of potential buyers before investor groups could step in, he said.

Don't limit investor activity

Limiting the investors' access to purchase single family homes, as the Trump Administration proposed, isn't a panacea to solve the problem either, White continued. They buy in areas with weak demand, and especially those properties which need repair.

"Who's going to rehab those houses? Who's going to fix those up?" White asked, adding most rehabilitation loans have strict guidelines which limit access.

Saunders and White then discussed several of the other ideas floated by the administration to improve housing affordability, including the 50-year mortgage and bringing back prepayment penalties.

"These people don't know," Saunders said. "They don't remember when there were prepayment penalties, or why prepayment penalties have gone away."

Why the AMI needs to be raised

NAMB is calling for FHFA to raise the area median income threshold for the GSEs' affordable housing programs to 130% from the current 80% to expand access to these low down payment offerings.

Taking on the hot button topic of credit report costs, NAMB wants:

• Regulatory oversight of credit reporting agency pricing for mortgage-related reports
• Transparency in pricing structures and justification for cost increases
• A cap on credit report fees to ensure affordability, particularly for the tri-merge reports used in mortgage underwriting

A 2026 legislative priority the paper lays out is for broker loan officer compensation reform. Because mortgage brokers since the financial crisis have limits on compensation structures, it limits borrowers' access to diverse lending options and competitive pricing, the report claims.

What NAMB is looking for is a legislative solution to modernize those compensation rules to create parity between brokers and retail lenders.

Keep the CFPB

During the discussion, White and Saunders discussed the need for the Consumer Financial Protection Bureau.

Under the Biden Administration, the CFPB was "too strict," White said. But some form of oversight is still needed.

"The biggest thing that CFPB offered when they first started was, quite honestly, education and compliance direction," added Saunders, herself a two-time past president of NAMB. The Department of Housing and Urban Development never put out small entity compliance guides for federal rules and regulations.

"But that was one of the things that the CFPB did which was obviously very helpful for all of us in the industry who are trying to do the right thing," she added.